US stock futures traded near the flatline on Wednesday as investors assessed a heavy earnings calendar, led by Netflix’s margin disappointment, Tesla’s upcoming results, and fresh signs of improving luxury demand in China. At 03:39 ET, Dow futures rose 38 points (0.1%), S&P 500 futures gained 10 points (0.1%), while Nasdaq 100 futures were mostly unchanged.
The muted open follows a mixed Wall Street session on Tuesday amid valuation concerns and renewed geopolitical uncertainty. US President Donald Trump cast doubt on his planned meeting with Chinese President Xi Jinping in South Korea later this month, though he said that if it occurs, it would be “very successful.”
Netflix shares drop over 6% on lower margins
Netflix shares fell more than 6% in after-hours trading after its third-quarter operating margin of 28% missed Wall Street expectations. The shortfall stemmed from an unforeseen tax expense in Brazil, which also prompted the company to cut its full-year margin guidance to 29% from 30%.
Despite the hit, Netflix posted record advertising revenue and higher membership growth, supported by strong global content such as KPop Demon Hunters and Wednesday Season 2. However, investors remain cautious about user engagement trends and the rise of AI-driven content on free streaming platforms.
Tesla earnings ahead
Tesla (NASDAQ: TSLA) is set to report results after market close. Analysts expect insights into how the EV maker’s marketing push and discount strategy have impacted margins, especially after the expiry of the $7,500 US EV tax credit.
While Tesla’s stock is up over 16% year-to-date, concerns linger that its valuation is more dependent on long-term innovation narratives like robotaxis and full self-driving than on current profitability.
Hermes signals modest China recovery
Hermes shares edged higher in Paris after reporting a 9.6% rise in Q3 sales to €3.88 billion, just below analyst forecasts of 10%. The luxury brand cited improving demand in China amid stabilizing property markets and a stronger stock market.
Hermes CFO Eric de Halgouet noted a “slight but encouraging” uptick in consumer confidence. The update, along with positive signals from L’Oréal and LVMH, points to gradual recovery in the luxury sector.
Gold rebounds after steep drop
After a 5% plunge on Tuesday, gold prices bounced back in early trade. Spot gold rose 1.1% to $4,153.24 per ounce, supported by bargain buying and a weaker dollar. The metal had touched $4,000 earlier in the session—its sharpest one-day fall since 2020.
Traders are awaiting key US inflation data later this week, which may influence the Federal Reserve’s interest rate path ahead of its October 28–29 policy meeting.
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